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Tone-deaf Health System Leadership: Business Consultants And A Symbolic Specialist Resignation

The catalyst for the heading of this blog was a text I recently received from a former district health board (DHB) chair on the response of Health New Zealand (Te Whatu Ora) to a paywalled article by journalist Isaac Davison in the NZ Herald (24 November): When a crackdown on business consultants isn’t a crackdown.

The article was on the supposed promised crackdown on the heavy and costly dependence on business consultants by Te Whatu Ora. The health entity’s response to the non-crackdown was described by the former DHB chair as ‘tone-deaf’.

Business consultancies continue to rake in valuable health dollars

Davison reported  that Te Whatu Ora had spent $102 million in the year ended 30 June 2022 on consultants for specialist services which was $37 million less than the previous year.

The difference is that the first year was before the new entity was established. This expenditure related to its creation. Some of it was also related to the Covid-19 response, including vaccinations.

In contrast, the later year was when Te Whatu Ora was supposed to be operational and therefore not dependent on business consultants. Consequently this expenditure should have been much lower.

Of the $102 million (2022-23), $70 million went to what are known as the ‘big four’ consultancies. Deloitte was by far the biggest beneficiary with $43.6 million (well up from up from $34 million the previous year).

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It was followed by PricewaterhouseCoopers (PwC) with $9.4 million, Ernst & Young (EY) with $7.9 million, and KPMG $8.7million.

Interestingly EY was by far the biggest earner of the four consultancies in the first year. But, in the second year, it fell off the ‘consultancy of choice’ perch, perhaps because of frustration over its performance in managing the transition implementation.

Davison reports sacked Health New Zealand Chair Rob Campbell as stating:

…consultant spending had remained at “an excessively high level” after his departure.

One reason for this was that the entire system had been designed by consultants who had “left plenty of room” for themselves within the organisation once it was up and running, he said.

In some cases, consultants had left Te Whatu Ora only to be rehired as consultants on a higher income.

Subsequently an Official Information Act enquiry by Radio New Zealand journalist Ruth Hill revealed a further $12 million spent on the ‘big four’ consultancies over the next four months (July-October 2023).

This brought the total expenditure on these consultancies since Te Whatu Ora’s formation to $82 million over the 16 months: $82 million spent on big four consultancies in first 16 months.

Tone-deaf trigger

What triggered the tone-deaf descriptor from the former DHB chair was Te Whatu Ora’s defence that some of the spending went towards “supporting change and transformation work resulting from the health reforms”.

How ‘tone-deaf’ is this was is illustrated by its barely comprehensible elaboration:

For example, Te Whatu Ora has engaged consultants to assist with the development of new national operating models, to establish the Pae Ora Delivery Unit within the organisation [which provides support, governance, and oversight of our key strategic change initiatives] and to assist with the implementation of new structures.

Failed value for money test

In an email to me about Davison’s article, a former DHB chief executive commented:

That is a total spend of $332.8m over just 4 years. Much of the rationale for this spend has been on “supporting change and transformation work resulting from the health reforms”.

It does beg the question about accountability and liability for the advice and impact of the changes on the community. Health reforms where there was no operating model developed/delivered, a rapid degradation of health services, primary care isolated, hospitals overloaded, mental health services in disarray a workforce crisis that continues to grow and huge increases in expenditure.

In most other industries this would be called a complete failure and people would be held accountable. As a country we are being taken for an absolute ride by the “all care no responsibility” approach by the big consultancy firms. If they were adding so much value then one would think that this country would be in a wonderful place. [emphasis added]

The overwhelming experience of the health system has been that the value of business consultants in the design, configuration and delivery of health systems has been underwhelming at least; costs far exceeded benefits.

Unfortunately the Labour government was tone-deaf to this ABC when it embarked on its health restructuring and so now is its new creation, Health New Zealand.

And now for something completely different: another form of tone-deafness

On 1 April Stuff journalist Kristie Boland reported the resignations of two senior forensic psychiatrists employed by Te Whatu Ora at Hillmorton Hospital in Christchurch: Senior forensic psychiatrists resign over staffing and safety issues.     

Psychiatrists are qualified medical doctors who have specialised in the human mind and diagnosing people with certain mental illnesses.

In this context forensic psychiatrists treat people with mental health problems who are in prison, a secure hospital or the wider community. It is a highly specialised role requiring a sophisticated understanding of the links between mental health and the law.

Boland reported the resignations of Dr Maxwell Panckhurst, acting clinical director and forensic director of area mental health services at Hillmorton Hospital, and Dr Erik Monasterio with over 25 years’ clinical experience, including as a clinical director in forensic medicine.

Dr Panckhurst had formally warned the Ministry of Health earlier the previous year of the risks of “ongoing nursing shortages”. Months later a mental health patient murdered an innocent bystander walking on a street.

In the words of Dr Monasterio the loss of trained psychiatrists was a “real concern”, Further:

“Mental health services are already short-staffed, so loss of senior trained psychiatrists is not something you replace soon.”

The resignations reflected issues in the workforce that “must be better understood and urgently addressed”.

Such a “significant loss of staff” would mean specialist mental health services would be limited in their capacity to deliver critical services, he said.

“Equally there will be risks to those that suffer from mental illness, and if it occurs in the forensic setting, it is likely to also increase the risk of significant harm to the public.

“Absence of appropriately trained psychiatrists will make it more difficult to recruit and retain staff, plan for the future development of services and provide training for psychiatrists in training (registrars).”

Te Whatu Ora’s response did acknowledge nursing shortages and claimed that it “…had several initiatives under way to address workforce pressures amid the national shortage.”

Seven months later

Between April and November the situation had not improved as the gravity of the impact on some forensic mental health patients and their victims was graphically and movingly reported by TVNZ’s Sunday programme (12 November): Devastating fallout from untreated psychosis

The programme also featured the insights of Dr Monasterio which were further covered four days later: Quitting chaotic public health service.

It began with:

One of the country’s most experienced psychiatrists said care for our most vulnerable is at crisis point and he had “no option” but to resign when it became clear he couldn’t affect change within the system.

Further:

“Services have become so disorganised, chaotic [and] under-resourced, my concern is that if the chaos continues, we will see more and more adverse incidents occurring,” he said.

Tipping point

Eventually there was a tipping point. In Dr Monasterio’s words:

“I took my responsibilities of leadership very seriously. I go well out of my way to try to bring attention to the difficulties that people with serious mental illness face. But my ability to lead an effective service was compromised,” he said.

He said his frustration was at what he claims was interference in his ability to his job as clinical director, disabling bureaucracy, and a failure to act on warnings about the dire state of services.

“Nobody wants to leave a service in a worse situation than you found it [but] when I felt I could have no impact in that, I felt that my only option was to resign.

“I was far more likely to be able to achieve better outcomes by stepping outside of the system.”

Unfortunately Health New Zealand’s reported response to Monasterio’s observations continued its practice of being tone-deaf to the specific issues raised.

Not a matter of resilience

Sometimes, when senior doctors and other health professionals raise serious concerns over workloads and related pressures over the years, it is suggested that resilience is what should be focussed on.

This is not an issue of resilience. Erik Monasterio is one of the most resilient of salaried medical specialists in my over 30 years representing them through music (he’s been in a band), humour, campaigning over wider issues, and mountaineering.

He is very funny. I recall a colleague once saying that he could give a lecture on watching paint dry and leave his audience rolling in the aisles in hysterics.

Nor is he is totally absorbed in his clinical work. He has an active intellectual life outside medicine. For example, he was active in the campaign over the proposed Trans Pacific Partnership Agreement’s impact on health in New Zealand.

This is evident in an address he gave to the Association of Salaried Medical Specialists in November 2015: Monasterio on effects of trade agreements on healthcare.

Monasterio is also an extraordinary mountaineer who has performed remarkable precarious feats, including in his home country of Bolivia.

How is it that a person with as much courage, sense of adventure and intellectual energy as this forensic psychiatrist could give up in despair and leave our public health system.

 Perhaps one of the first action steps of new health minister Dr Shane Reti should be to require Health New Zealand to replace its business consultants with audiologists. Just a thought!

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